Russia's war of aggression against Ukraine was funded by a bad energy policy, causing many in Europe to face the hard reality that climate extremism is the greatest danger to world peace and stability. Even Germany was blind to the risk of becoming energy dependent on the madman Russian President Vladimir Putin, causing them to reshape their energy policy.
The green energy madness has brought the world to the brink of nuclear war as Putin puts his nukes on high alert. Oil prices soared and are now pulling back as many people who can avoid buying Russian oil and natural gas are. The Wall Street Journal reports that the U.S. is sanctioning Russia's central bank to prevent the government from using its emergency reserve currencies to protect the economy from the Western pressure campaign, senior U.S. officials said ahead of the opening of U.S. markets. What is even crazier is that Europe and the US seem to be rushing into a deal with another country that is being run by a madman, Iran trying to secure a nuclear deal.
As reported by Reuters, BP (NYSE:BP) is abandoning its stake in Russian oil giant Rosneft in an abrupt and costly end to three decades of operating in the energy-rich country, marking the most significant move yet by a Western company in response to Moscow's invasion of Ukraine. Rosneft accounts for around half of BP's oil and gas reserves. A third of its production and divesting the 19.75% stake will result in charges of up to $25 billion, the British company said, without saying how it plans to extricate itself.
Germany is waking up to energy realities. Reuters reports that, "Germany signaled a U-turn in key energy policies on Sunday, floating the possibility of extending the life-spans of coal and even nuclear plants to cut dependency on Russian gas, part of a broad political rethink following Moscow's invasion of Ukraine. Others are also looking to find ways to avoid buying Russian oil and gas. Europe's top economy has been under pressure from other Western nations to become less dependent on Russian gas, but its plans to phase out coal-fired power plants by 2030 and to shut its nuclear power plants by end-2022 have left it with few options."
Germany has learned, but sadly the Biden administration has not. They seem to want to double down on their anti-fossil fuel agenda. Yesterday, White House Press Secretary Jen Psaki said that Biden wants to reduce our dependence on foreign oil by using green energy, not by expanding U.S. energy production. Psaki said that the Keystone Pipeline was not processing oil through the system. (IT WOULD HAVE BEEN BY NOW). That does not solve any problems.
"That's a misdiagnosis or maybe a misdiagnosis of what needs to happen. I would also note that on oil leases, what this justifies in President Biden's view is the fact that we need to reduce our dependence on foreign oil, on oil in general … and we need to look at other ways of having energy in our country and others."
So, in other words, repeat the mistake of Europe that has brought us to the brink of a world war.
The Biden administration, of course, over the weekend, agreed with Europe to block certain Russian banks from the swift system. They are still trying to avoid banks that process oil and gas payments, but that might not matter. Many private companies are trying to avoid buying Russian oil and gas apparently because they were aghast at the way President Putin has executed war crimes and because they're afraid they won't get paid.
According to Josep Borrell, the bloc's foreign policy chief, Bloomberg reports that European Union foreign ministers agreed to send 450 million euros ($500 million) in military aid to Ukraine for lethal weapons. The aid will be financed by the EU's European Peace Facility and will see the bloc supply arms to a country at war for the first time in its history. Another 50 million euros will be provided for non-lethal purposes, Borrell said at a press conference in Brussels Sunday.
Oil is going to be moved by headlines, and the upside price risk is substantial, yet there will be some big ups and downs. Talk of more releases from global oil reserves may help, but most of that will just be bought up by China. China is buying, not selling, and so should you on breaks.
EBW Analytics Reports that the NYMEX April contract brushed off the loss of 35 gHDDs last week to gain 9.3¢ in volatile trading as the March contract whipsawed into final settlement and Russia's invasion of Ukraine added to bullish sentiment surrounding energy commodities. Strong production freeze-offs as temperatures plunged in the Rockies and South Central further cut supply as much as 3.5-4.0 Bcf/d while temperatures rebounded into the weekend—supporting heating demand and spot market pricing.
However, this week, rapidly falling heating demand and rebounding production—followed by a 17 Bcf/d week-over-week decline in weather-driven demand next week—may create physical market pressure and open the door to downward pressure for April contract.